AXIS Capital Q4 Earnings Top Estimates on Solid Underwriting

AXIS Capital Holdings Limited AXS posted fourth-quarter 2024 operating income of $2.97 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 1% year over year. The insurer’s results reflected improved net investment income and higher premiums, offset by higher expenses.See the Zacks Earnings Calendar to stay ahead of market-making news.Quarterly Operational Update of AXSTotal operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.8%. The top line rose 6.7% year over year on higher net investment income and higher premiums earned.Axis Capital Holdings Limited Price, Consensus and EPS Surprise Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited QuoteNet premiums written increased 14% to $1.2 billion, attributable to a 9% increase in the Insurance segment and a 64% surge in the Reinsurance segment.Net investment income increased 5% year over year to $195.8 million, driven by income from fixed maturities portfolio due to increased yields, partially offset by lower returns on alternative investments. The Zacks Consensus Estimate was pegged at $190 million. Our estimate was $188.7 million.Total expenses in the quarter under review increased 38.4% year over year to $1.2 billion due to higher general and administrative expenses, acquisition costs and foreign exchange gains. Our estimate was pegged at $1.3 billion.Catastrophe and weather-related losses and net of reinsurance were $64 million, attributable to Hurricane Helene and other weather-related events. AXIS Capital’s underwriting income was $129.5 million against a loss of $274 million in the year-ago quarter. The combined ratio improved 3040 basis points (bps) to 94.2%. The Zacks Consensus Estimate was pegged at 92%. Our estimate was 93.4%.Segment ResultsInsurance: Gross premiums written improved 7.4% year over year to $1.7 billion, driven by increases in property, accident and health, and credit and political risk lines on new business, partially offset by a decrease in cyber lines.  Our estimate and the Zacks Consensus Estimate were both pegged at $1.1. billion. Net premiums earned increased 11.9% year over year to $1 billion. Our estimate was $1 billion.Underwriting income was $0.1 million versus a loss of $0.6 million incurred in the year ago quarter. The combined ratio deteriorated 220 bps to 90.4%. The Zacks Consensus Estimate for combined ratio was pegged at 87%.Reinsurance: Gross premiums written increased 36.9% year over year to $275 million, driven by accident and health lines on new business, motor, accident and health, and professional lines. Our estimate was $179.5 million. Net premiums earned increased 0.7% year over year to $351 million. Our estimate was $413.7 million and the Zacks Consensus Estimate was $372 million. Underwriting income was $0.4 million versus a loss of $212.4 million in the year-ago quarter. The combined ratio improved 7190 bps year over year to 90.9%. The Zacks Consensus Estimate for combined ratio was pegged at 118%.Full-Year HighlightsTotal operating revenues of $6.1 billion missed the Zacks Consensus Estimate by 2.8%. However, the top line rose 6.6% year over year on higher net investment income and higher premiums earned. Net premiums written increased 13% to $5.8 billion, driven by 13% in the Insurance segment and an increase of 12% in the Reinsurance segment.AXIS Capital’s underwriting income of $571.5 million increased more than three-fold year over year. Combined ratio of 92.3% improved 760 bps.Financial UpdateAXIS Capital exited 2024 with cash and cash equivalents of $2.1 billion, doubled from the 2023-end level. Debt was $1.3 billion at quarter-end, up 0.1% from the 2023-end level. Book value per share increased 20.4% from 2023-end to $65.27 as of Dec. 30, 2024. Annualized operating return on average common equity was 18% in 2024, which expanded 760 bps year over year.Capital DeploymentAXS returned $350 million to shareholders in 2024, including share repurchases of $200 million and dividends of $150 million. The insurer had $200 million of remaining authorization as on Dec. 30, 2024.Zacks RankAXS currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other InsurersThe Travelers Companies TRV reported fourth-quarter 2024 core income of $9.15 per share, which beat the Zacks Consensus Estimate by 39.3% and improved 30.5% year over year. Travelers’ total revenues increased 10.4% from the year-ago quarter to $11.9 billion. The top-line figure beat the Zacks Consensus Estimate by 1%.Net written premiums increased 7% year over year to a record $10.7 billion, driven by strong growth across all three segments. Our estimate was $10.8 billion. The Zacks Consensus Estimate was pegged at $926 million. TRV witnessed an underwriting gain of $1.4 billion, up 30.5% year over year. The consolidated underlying combined ratio of 84% improved 190 bps year over year.RLI Corp. RLI reported fourth-quarter 2024 operating earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 14.5%. The bottom line decreased 46.8% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 15.3% year over year, driven by higher net premiums earned and net investment income. The top line matched the Zacks Consensus Estimate.Gross premiums written increased 9% year over year to $473.2 million. This uptick can be attributed to the solid performance of the Casualty segment (up 18.3%). Our estimate was $550 million. Underwriting income of $22.2 million decreased 62.8% year over year. The combined ratio deteriorated 1,170 bps year over year to 94.4%. The Zacks Consensus Estimate for the metric was pegged at 96%, while our estimate was 102%.W.R. Berkley Corporation’s WRB fourth-quarter 2024 operating income of $1.13 per share beat the Zacks Consensus Estimate by 20.2%. The bottom line improved 17.7% year over year. Operating revenues were $3.5 billion, up 9.2% year over year. The top line beat the consensus estimate by 4.2%.W.R. Berkley’s net premiums written were $2.9 billion, up 8% year over year. The figure was lower than our estimate of $3 billion. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 180 bps year over year to 90.2%. The Zacks Consensus Estimate was 91%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI): Free Stock Analysis Report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report W.R. Berkley Corporation (WRB): Free Stock Analysis Report Axis Capital Holdings Limited (AXS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks